Q: What should I consider when purchasing auto or car insurance?

A. There are a number of factors you should consider when purchasing any product or service, and insurance is no different.

Here is a checklist of things you should consider when purchasing auto insurance.

First, purchase the amount of liability coverage which makes sense for you.
Second, you should decide which optional coverages you want. For example, do you want the optional physical damage coverages in Part D or is the market value of your car too low to warrant purchasing them.
Finally, once you have decided what you want in your automobile insurance policy, you can now decide who you would like to purchase the insurance from. For example, you may decide you like the idea of purchasing insurance from a mutual company rather than a stock company.

Q: How can I lower my car insurance rates?

A. There are a number of things you can do to lower the cost of your car or auto insurance. The easiest thing to do is to shop around. It is not surprising to find quotes on automobile insurance that can vary by hundreds of dollars for the same coverage on the same car. When you shop, be careful to make sure each insurer is offering the same coverage. Many insurers use the ISO policy forms, but this is not always the case.

Another way to lower the cost of your automobile insurance is to look for any discounts that you may qualify for. For example, many insurers will offer you a discount if you insure multiple cars under the same policy, or if you have had a driver education class in the last five years. Be sure to ask your agent or your company about their discount plans.

Another easy way to lower the cost of your automobile insurance is to increase the deductible. Simply raising your deductible from $250 to $500 can lower your premium sometimes by as much as five or ten percent. However, you should be careful to make sure that you have the financial resources necessary to handle the larger deductible.


Q: What factors can affect the cost of my auto insurance?

A. A number of factors can affect the cost of your automobile insurance - some of which you can control and some which are beyond your control. The type of car you drive, the purpose the car serves, your driving record, and where you live can all affect how much your automobile insurance will cost you.

Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than do single people.

Q: Suppose I lend my car to a friend, is he/she covered under my automobile insurance policy?

A. Whenever you knowingly loan your car to a friend or an associate, he or she will be covered under your automobile insurance policy. In fact, even if you do not give explicit permission each time a person borrows your car, they are still covered under your auto insurance policy as long they had a reasonable belief that you would have given them permission to drive the car.

Flood Insurance

Did you know that your homeowners insurance does not cover flood damage? Insurance against flood must be obtained separately. A flood insurance policy also reimburses you for the work that you and other family members did to sandbag your homes, move furniture and remove debris.


The Federal Emergency Management Agency’s (FEMA) maps are important when it comes to flood insurance because if they show that your home sits in a 100-year flood plain, you must buy federal flood insurance in order to get a mortgage. If you live outside a high-risk zone, or if you no longer have a mortgage, flood insurance is optional.

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Homeowners Insurance Coverage

The following coverage definitions should help you understand your homeowners insurance policy--but be sure to consult your insurance company representative to assure that you have the right coverage for your needs.

Dwelling Coverage

The dollar amount carried to cover your home and any structures attached directly to it. Ideally, the amount of coverage you carry should equal the cost of rebuilding your home after a total loss.

Other Structures Coverage

Covers other structures set apart from the dwelling on the residence premises, such as a detached garage. This coverage applies up to the limits provided in your policy and can be increased if necessary.

Personal Property Coverage

This coverage provides worldwide coverage for personal property owned or used by the insured.

Loss of Use

This coverage is available when you cannot live in your home due to a covered loss. It pays living expenses, which go over and above your normal living expenses up to the limit provided in your policy.

Liability Coverage

Liability coverage protects you in two ways. First, it provides for your legal defense against a liability claim--whether the claim is legitimate or not. Second, it will pay any court judgments against you up to the policy limit.

Medical Payments

This pays emergency medical bills for anyone injured on your property or any injury caused by a member of your family or a pet, regardless of where it happens. All bills are paid, up to your policy limit, whether or not you're legally responsible.

Homeowners policies have many other optional features available to you depending on your individual needs. These include earthquake and scheduled personal property coverage.


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